"No Trade" Theorems claim that the mere arrival of new information can not induce trade between rational agents, even in the presence of asymmetric information. We analyze an economy in which the information agents receive is without noise. As long as preferences abide by the Sure Thing Principle, the no-trade result holds. However, under more general preferences, which do not satisfy the Sure Thing Principle, we find that dynamic consistency is a necessary but might not be a sufficient condition for information not to induce trade, even with noiseless information. We provide sufficient conditions for a No-Trade.
Theorem and investigate the pattern of trade with and without dynamic consistency of preferences.